Shares of Adani Group’s listed firms were hit by a sell-off Tuesday after Indian media reports raised questions about the conglomerate’s debt repayment claims, resuming a fall in the group’s stock prices that began in January following short seller Hindenburg Group scathing report accusing the group of fraud and stock manipulation.
Shares of the conglomerate’s flagship firm Adani Enterprises were down around 7% in late afternoon trading local time, while shares of the group’s other listed firms slumped around 5%.
An investigative report by Indian business news outlet The Ken raised questions about the group’s claim about repaying $2.15 billion in loans borrowed against its stock earlier this month.
Citing bourse filings, the report noted that banks have not yet released a significant portion of Adani’s listed shares that the company had borrowed against, indicating that only a partial loan repayment was made to avoid pledging more shares, and this has been “misrepresented in publicity material.”
Business news daily Economic Times separately reported that the Adani Group was seeking to renegotiate the terms for $4 billion worth of loans it had borrowed last year to fund its acquisition of two Indian cement companies—ACC and Ambuja Cements.
Citing multiple sources “aware of the ongoing negotiations,” the ET report added that the group is negotiating the extension of the term for a $3 billion bridge loan from 18 months to five years or longer, while also attempting to extend the tenure of $1 billion worth of mezzanine loans from 24 months to five years.
According to our estimates, the current net worth of Gautam Adani, the group’s founder and chairman, stands at $46.1 billion—making him the 24th richest person in the world. The billionaire’s fortune has fallen by $4.2 billion in the past 24 hours. The billionaire, formerly Asia’s richest and the world’s third richest person, has seen his fortune plummet by nearly two-thirds in the past two months, down from $126.4 billion.
The latest selloff of Adani’s listed shares comes after a period of relative calm and even a slight recovery in the past few weeks. The Adani Group has been embroiled in controversy since late January, when U.S.-based activist investor Hindenburg Research published a report accusing the conglomerate of engaging in “brazen stock manipulation and [an] accounting fraud scheme over the course of decades.” Alongside the report, Hindenburg also disclosed it had taken a short position against Adani’s listed shares. The company vehemently denied Hindenburg’s allegations and even attempted to tap into nationalistic fervor by painting it as an attack on India and its institutions.
The Adani Group wants you to believe it has repaid all its loans against promoters’ shares. Here’s why you shouldn’t (The Ken)
Adani seeks more time to pay ACC, Ambuja debt (Economic Times)
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